Mayors are increasingly important actors in the global economy. Case in point: Bloomberg's decision to become Mayor of NYC. Why would a billionaire want to be the Mayor of a town once presided over by Ed Koch, who went on to host People's Court, I think. Because as Mayor of New York, he's got his hand on one of the most powerful economic and creative engines in the world.
Today's Wall Street Journal (sub required) features an Op-Ed by Bloomberg and NY Senator Chuck Schumer on why New York City is losing its position as the preeminent global financial market and what can be done about it.
From the piece,
"In recent months, there has been a lot of media chatter about the possibility of London taking over New York's position as the world's financial capital. Such speculation, although overblown, has focused our attention on a broader and legitimate concern: Unless we improve our corporate climate, we risk allowing New York to lose its pre-eminence in the global financial-services sector. This would be devastating both for our city and nation.
One of the engines of growth for the U.S. economy, the financial-services industry in New York has long possessed significant comparative advantages over London and all other cities. These advantages include the broadest, most efficient and liquid capital markets in the world, and a concentration of the world's biggest financial firms -- which have a much larger presence here than anywhere else. This city dominates global private-equity markets, secondary trading markets, and mergers and acquisitions.
New York has unparalleled quality of life and cultural diversity, which global companies increasingly seek, as well as a dynamic labor market -- our unemployment rate is lower than the nation's. Taken together, these advantages explain why New York's financial-sector employment numbers are greater than any other city's.
Yet while New York remains the dominant global-exchange center, we have been losing ground as the leader in capital formation. In 2005 only one out of the top 24 IPOs was registered in the U.S., and four were registered in London. London is gaining ground in other areas too, but it is not only London we need to worry about. Next year, more money will be raised through IPOs in Hong Kong than in either London or New York.
We cannot ignore these warning signs. That is why New York has hired a consulting firm, which will issue a report in November identifying the specific variables that are negatively impacting our financial-services industry and recommending an action plan to correct them.
Based on the work completed so far, there are four factors that bear close attention: globalization of the capital markets, overregulation, frivolous litigation and incompatible accounting standards."